POTOCNIK: “We should be proud of what we have achieved in Europe”

I will start from the story of economic development of the European Union.
Even if growth and jobs were pretty much the narrative of our political attention, this is maybe best captured in the last five decades of growth rates in the EU, according to OECD data, where some decimal points are not correct, but the direction is certainly correct: in the 1960s we had an average of 5.4%, in the 1970s 3.8%, in the 1980s 3.1%, the 1990s saw 2.3%, and the first decade of this century we had 1.4% and if I remember well we are in this decade somewhere around 0.9%.
Obviously the growth rates which we are reaching in the EU are falling, and of course one can ask if this is our major problem or if it’s really a major problem connected with the distribution of what we basically produce. But the fact is that the EU did not answer very well all the challenges which are connected to globalisation, which brings us to the questions of competitiveness of the EU, how to strengthen it.
That’s the idea which I’m constantly trying to promote which is that improving the management of resources is actually the right way to go. Why? Because on the one hand it decreases the cost of the companies, making them more competitive, and on the other hand having fewer side effects and pressure on the environment and human health – basically the development of a new economic structure and a new economic model which is different than the one what we are currently living in.
By adopting sustainable development goals (SDGs) in September 2015 we have all somehow globally acknowledged that the way we are doing things is not right and that we have to change. One of these goals is goal number 12 about sustainable production and consumption which for me is particularly important.
If we seriously want to deal with climate change, if you seriously want to improve competitiveness, if you seriously want to decrease the effects on environment, be it water, be it quality of health, be it disappearing biodiversity and so on, you have to change the way you produce and consume. And I think this is an ideal moment, if we understand it, as we have a new innovation opportunity that we basically shift to something in Europe around which we could gather our activities, and I would very much advocate that we move in that direction.

You also come from what is not a ‘periphery’ economy, but one of the smaller EU member states which does not have two centuries of major heavy industry and tradition and the society that goes with that.

That may be an advantage. Of course, I think that that one of the problems for me is a transition to an economic system which is more balanced, which is sustainable in the long run and is absolutely unavoidable – it’s a point of departure for me.
Change is always difficult if you have in the past invested a lot and you have a lot of stranded assets, because then you have a lot of interests which are preventing the change. Even, if I could say, a lot of that investment was done in good faith and I’m not blaming anybody for that, this is a fact, and sometimes the countries which have less of those stranded assets, but a good potential in development are actually in an advantageous position.
I think it would be important, for example, for big countries like China, India, etc, not to repeat some of the development mistakes in the developed part of the world, but also in countries like yours and mine.

For the next generations coming along, do you believe that Slovenia would be a nice, economically and socially healthy place to be in the next 15 to 20 years?

We have all the objective ground for that. If we would not be in that situation it will be due to our wrong approach and our wrong policies.

Where do you believe that the periphery went wrong? Not only Greece, but also Spain was on the verge of collapse, Italy is struggling because of its bonds and banks, and Portugal and Ireland which are medium-sized economies, just about escaped.

There is no simple answer, and there are different stories for different countries. I think it would not be fair to put all of them into a kind of same reason behind the problems.
It is a bit connected with a kind of cultural attitude – growing the level of responsibility via the implementation of legislation, how seriously some matters are considered. It is pretty obvious that this has succeeded in some of the Nordic countries which are strongly enriched in the democratic societies. This you can’t change overnight, even if you have to do everything and struggle for that. Even if somehow in the EU we all believe in the same values and in the same rule of law, it is clear that there are still differences among members states and I think that partially this is connected as well: rule of law, corruption, and we have objective criteria for those things across the board. Of course, for the younger countries this is a bit more difficult, but this is the whole story.

A European union of two speeds is not avoidable?

We are already living in a European Union of two speeds. If for example you have the same monetary union, that means that those countries have different rules than other countries. We have countries which are in the Schengen area and countries which are not.
But I believe that any kind of differentiation of that type is weakening the European Union. I think we all have to aspire to being as much united as possible, trying to keep in mind the interest of everyone.
Being small or big is our major advantage, I would even go as far as to say that SDGs is somehow the leading start for all societies in the world. If you want to implement good SDGs you need to have good governance. And the only model where member states on a significant level have actually joined their strength and power and have actually given up some of their responsibilities is the European Union.
We developed a model which for 70 years has been promoting positive values and delivered exactly the thing for which it was established – preventing future conflicts and wars. And when you are talking about developing SDGs, I think the European Union is an excellent model and how globally we will have to strengthen our governance. From the EU story we can learn from experiences where nations are more keen to cooperate, where they see more problems, and how this could be strengthened, because the 21st century is the century where we are basically on the planet living like in a small village. We are all interconnected or interdependent, our individual and collective responsibility is enormously increased and we have to be aware that this responsibility bares also some responsible decision making and some joint solution seeking. In that respect, we should be proud in what we have achieved in Europe, even if we see a lot of problems in EU development and also globally.

But the general discontent either in France or Italy, or even in the US, is a fact.

It is a real fact, but it’s not discontent with the European Union. It’s more discontent with the fact that people have lost the connection with the political elite. This is a serious problem of today and ruling the world like maybe it was possible in the past, in the era of social media and so on, is not possible any more. This connection needs be re-established and politicians should start to understand better for whom and why they are there and bare their responsibility which is enormous. But also we citizens have to respect that, so it’s a kind of vicious circle which we are hooked and we have to really act in a way that we come out of that vicious circle, because it is not leading us in the direction we described before.

Traditionally the Cyprus Institute has gone for technocratic researchers in their respective field. You’re coming in with not only economic but a political and socio-economic background. Where should we be looking at?

As members of the board of trustees, our role is to evaluate and steer the future developments. I think that in a relatively limited number of years’ of existence the Cyprus Institute has reached quite a high level of excellence recognised in many ways. Each scientific work should of course also look to how to improve the quality of life of all of us. This science-policy interface needs to be strengthened and I would always be in favour that this would be strengthened.
We should also be taking a bit more into account the economic consequences of the research that is performed here because in many ways maybe you don’t see the direct connection to the new economic transition which we talked about, but if you have very highly appreciated work in the area of solar energy research you are basically searching for new solutions of the future economic development.
I think that these two sides which are living a bit in isolation could be better connected and that would be helpful for the Institute on the one hand and on the other hand for the policymakers.
This is a kind of general problem in the science-policy making world and this is where this technocratic part of the scientific work could be connected to policy-making. If you want to do that you have to go via strengthening the economic logic – the social part and so on, and maybe it is now time to start thinking more about this direction.

So, more funding or more brainpower?

It would be difficult to say. Certainly enough funding and certainly enough brainpower. Evaluating how the situation currently stands is premature for me, but it is supporting – science and research are absolutely necessary in societies because they provide you with a kind of compass to fix the broken compass of the situation in which we are. Even in the times where the economic situations is pretty harsh, it’s really important to keep that kind of support because this is the ticket which you buy to exit from the situation in which you are stuck and I think this should be properly valued and properly understood.

When you are with family and friends and a teenager comes up to you, what do you tell them? They are still immature citizens, but they are just about to get into the real world.

I tell them that some decisions in life are very important, that basically you always have to live and do the things in a way that you feel happy about. And even if sometimes you would question these, it is important that you surround yourself with the right open-minded, positive thinking people, and always search for people around you with this kind of human value added, which will make your life more beautiful and more worthwhile. That’s what matters. Unfortunatel,y we learn that a bit late, that’s why it’s good if you tell it to youngsters.

Is that why there is a correlation between the happiness index and developed economies?